Grain and fertilizer traffic rose 13 per cent in Canadian National Railway's fourth fiscal quarter, toward a small full-year increase in an otherwise record year on CN track.
Canada's largest rail network on Tuesday reported a fourth-quarter profit of $610 million on a record $2.53 billion in revenues, up from $592 million on $2.38 billion in the year-earlier period -- and a full-year profit of $2.68 billion on a record $9.92 billion in revenues for 2012, up from $2.46 billion on $9.03 billion in 2011.
CN's growth in 2012 "continued to outpace that of the overall economy, generating the highest volumes and earnings in company history," CEO Claude Mongeau said in a release.
Commodities related to oil and gas, particularly crude oil, saw strong growth, Mongeau said, but he noted the railway also benefited in 2012 from "increased wheat and soybean exports" among other improvements.
CN, he said, now expects to see "continued gradual improvement in the economy and further growth opportunities in intermodal, energy and other resource markets" in 2013.
Among the company's assumptions for the coming year are a 2013-14 grain crop in both Canada and the U.S. "in line with their respective five-year averages."
Crop production in Canada in 2012-13 was slightly above the five-year average, while production in the U.S. was below the five-year average, CN noted.
CN's grain and fertilizer handle for its fourth quarter ending Dec. 31 reached 171,000 carloads, up 13 per cent from the year-earlier period, while full-year grain and fertilizer carloads were up one per cent at 597,000. CN's 2012 traffic across all segments hit 5.06 million carloads, up four per cent.
Grain and fertilizer revenue in CN's Q4 was up 11 per cent at $459 million, for revenue per carload of $2.684, down one per cent. Full-year grain and fertilizer revenue rose four per cent to $1.99 billion, for revenue per carload of $2,663, up three per cent. CN's 2012 revenue per carload overall reached $1,767, up six per cent.
CN said its increase in total revenues was largely attributable to higher freight volumes, due in part to growth in North American and Asian economies, and the company's "performance above market conditions in a number of segments."
However, Montreal-based CN also logged increased volumes in its second quarter "as a result of a labour disruption at a key competitor," namely the strike by unionized engineers and conductors at Canadian Pacific Railway in May.
CN also booked more revenue from freight rate increases, a higher fuel surcharge and a "positive translation impact from a weaker Canadian dollar on U.S. dollar-denominated revenues."
CN's operating expenses in 2012, meanwhile, rose nine per cent on "higher labour and fringe benefits expense, increased purchased services and material expense, as well as increased fuel costs."
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